Snap's Ad Business: Challenges and Improvements

Snapchat's struggles with brand advertising indicate the need to focus on improving its direct response ad business and attracting more advertisers.

### Snap Inc. Faces Challenges in Ad Business, Despite Some Positive Signs
* 📉  Snap Inc. stock fell almost **25% after its latest earnings report**, the biggest drop since February, with **several analysts lowering price targets**.
* 📊  Positive signs included growth in **active advertisers**, Snapchat Plus generating over **$100 million in revenue**, and improvements in **direct response advertising**.
* 🏢  The company is still facing challenges in brand advertising, indicating **more work is needed in the direct response advertising business**.
* 🔍  Snap Inc. has **850 million monthly active users**, but it is still considered a **smaller player** compared to competitors like Meta.
* 🔗  Snap Inc. is working to catch up with larger competitors in the ad business, with a focus on **improving its direct response advertising capabilities**.
* 🤔  Analysts question whether it is fair to directly compare Snap Inc. to larger competitors like Meta, given their **different market positions and ad business scales**.

You just go back to the original
business, the advertising-based business, and where they did well and
where they didn't. What was your conclusion?
Well, it does feel like a big step back for SNAP, given all of the work that
it's been doing in overhauling its ad business.
There were some positive signs in the report.
We saw growth in the number of active advertisers.
We saw that it was successfully able to diversify its revenue streams with
Snapchat Plus now bringing in over $100 million in revenue.
And there were some improvements in its direct response advertising business,
which is, of course, what it's been really focused on fixing and improving.
The fact that brand advertising, though, is still so much of a headwind for SNAP,
tells me that there is a lot more work to do within its direct response
advertising business, both to get more advertisers on board and to get them to
commit more budget to the app.

Just looking at the stock down almost 25%, that does put it on track for its biggest drop since February. And a number of analysts cut their price targets on it. We have to kind of frame snap in, I guess, the context of competition with better. Jasmine, is that fair to do? And what would we learn if we did that? Yeah. I mean, I was actually just having this conversation yesterday about whether it's still fair to compare SNAP to another because they really are playing in very different leagues. And one of the reasons we saw investors reward Amanda despite all of that is spending and of our spending that it continues to push is because it has this massive ad business that it was able to show a lot of improvement there. SNAP is a much smaller ad player and so and it has struggled to keep up and it's still working to catch up with matter. And so it really needs to be focusing on

that now.
It's not small by any means. We also heard that 850 million monthly
active users was the number of users on the app now.
So I think a lot of times it's framed as being a small player, but certainly
isn't. But in terms of scale, definitely still
smaller than matter.

Snap Shares Tumble on Weaker Sales, Profit Outlook

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SNAP's Struggle with its Advertising Business

Snapchat's advertising business is facing challenges, despite some positive signs of growth in the number of active advertisers.

The company has been able to diversify its revenue streams with Snapchat Plus, but still faces difficulties in brand advertising.

This has led to a significant drop in stock and a need for SNAP to focus on competing with larger players in the industry.

The Scale of the App and Its Active Users

The app has a substantial 850 million monthly active users, challenging the perception of its size.

However, it still remains smaller in scale compared to "Matter.